Govt sells savings certificate worth Tk. 73.52 billion

The government has sold Tk 73.52 billion in savings certificates in July, the first month of the new fiscal year.

Compared to the same period last year, the savings certificate sells have increased by 49 percent this year, said latest Bangladesh Bank data.

The rise in sells however, is still two percent less than the figures in June, the last month of FY2016-17.

Previously, the government had announced it would decrease the interest rate on savings certificates from the start of the new fiscal year.

However, the new interest rates have not taken effect despite repeated assurances from Finance Minister AMA Muhith.

According to the National Saving Certificates Department, the government spent approximately Tk 2.29 billion of the earnings to make payments on previous savings certificates in July, leading to net sales of Tk 5.35 billion.

Net sales are calculated by subtracting payments on previously sold savings certificates from the income from new sales.

Money earned from selling savings certificates are stored in the treasury and are used for various state financed programmes and projects.

The government sold about Tk 17.1 billion in family savings certificates, Tk 13.2 billion in three-month profit-based savings certificates, Tk 6.48 billion in pension savings certificates and Tk 4.80 billion in five-year savings certificates in July.

Sales of savings certificates have climbed steeply due to low rates of interest on bank accounts and stock market uncertainty.

Banks are currently paying between 3 to 6 percent interest on accounts. In contrast, interest rates on such accounts could be higher than 12 percent five years ago.

The interest rate on savings certificates, however, remains above 11 percent. This resulted in a record Tk 750 billion in savings certificates being sold in FY2016-17, a 40 percent increase over the previous fiscal year.

Source: The Daily Ittefaq

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